A TCI Book Review
"Butterfly customers" are defined by O'Dell and Pajunen to be people that flit from one store or supplier to another, always searching for a lower price or a different shopping experience. They have no loyalty to any particular store, and are always in search of a better deal or a new promotion.
"Constantly in motion for the best deal, the greatest choice, the latest trend, this creature selects a store or brand apparently at random, often abandoning the tried and true for the newest, the closest, the cheapest.
It's exhausting to be a butterfly and disheartening to serve one. There isn't one single store that captures all of their interest, dollars or oh-so-precious time. Consumers have been transformed from loyal, reliable and predictable patrons into transients - here today, flitting across the street tomorrow." (p. 1-2)
Butterfly customers have been spawned by the proliferation of options in the retail environment, in the last few decades, including suburban shopping malls that pulled people away from traditional downtown retail and service environments, and national chains of specialty stores that can take advantage of huge purchasing power to obtain the lowest prices for consumers. This is compounded by the fact that many consumers no longer trust retailers and service providers to deliver what they say they will, and to live up to expectations.
According to the authors, there are eight characteristics of Butterfly Customers:
From the business perspective, though, Butterfly Customers are expensive to win (as there are significant costs entailed in getting their attention in the first place), difficult to service (as they are highly demanding), and almost impossible to keep.
However, all is not lost for the poor retailer....At the other end of the spectrum, the authors propose the concept of the "Monarch", a loyal customer who will return again and again because he or she trusts the retail or service operation and knows that what they expect will be what will be delivered.
"The Monarch is still a butterfly. The characteristics we described earlier still describe them. They are intelligent, curious, suspicious, and know their own worth. But the Monarch is a species of butterfly which, despite taking various byways and pathways, can be counted on to return to the familiar on a regular basis.
These loyal Monarch Customers are less expensive to attract. It usually doesn't take an expensive advertising campaign or give-away promotion to entice them back to your business. They take less transaction time from your staff and are quicker to buy because they are less skeptical and don't need a large amount of convincing. They are more willing to buy and less price sensitive all around." (p.35-36)
The authors describe five characteristics of Monarchs:
They propose the idea of the 'service kaleidoscope' - a three dimensional way of looking at a business to determine the extent to which it breeds trust in the customer. These three dimensions are:
So, for example, if the media message about a retail environment suggests that offers upscale and quality merchandise, yet the physical surroundings suggest 'bargain warehouse' and the staff are surly and untrained, the customer will experience dissonance and not trust the business. (In O'Dell and Pajunen's terms, their "trust account" will be depleted.) They likely won't be back, having turned into a Butterfly Customer for someone else. Loyal Monarch Customers can be found in those environments where the three dimensions are in accord and support one another.
The authors have developed a self assessment tool for a business (which they call a '3-D audit', as it focuses on these three dimensions) and much of the book outlines the questions to be asked and procedures to be followed in undertaking this kind of assessment.
Another fundamental point that they make is that there needs to be another kind of three-dimensional harmony in place for a retail or service business to work - this time between the managers, the employees and the stockholders. This underscores for them the importance of leadership in creating the kind of environment that customers will trust - as this will create profits for the business, jobs and wages for the employees, and a return-on-investment for the equity owners.
One interesting point of contention for the authors that they deplore frequently throughout the book is the 'service excellence' feats that some other writers have lauded as examples of outstanding customer service (the sort of thing where a hotel front desk clerk charters a plane to return a briefcase that a guest has left). They say that these sorts of things are merely silly stories that raise expectations among consumers, but ultimately only end up costing everybody more (after all, somebody had to pay for that flight, most likely subsequent customers through prices that had to be raised to pay for all these feats of service heroism).
The Butterfly Customer is an interesting (if somewhat lightweight) book, with undoubtedly several good ideas about improving retail and service offerings to attract more loyal customers. Whether it really is as possible as they seem to suggest to create and keep loyal customers in this era of ever-proliferating consumer options is an open question at this point.
IF YOU HAVE ANY COMMENTS ON THIS REVIEW (I.E. DISAGREEMENTS, ADDITIONAL PERSPECTIVES, ETC.) OR SUGGESTIONS FOR FUTURE BUSINESS BOOK REVIEWS, WE'D LIKE TO HEAR FROM YOU! CONTACT US AT firstname.lastname@example.org
• • • •
TCI Management Consultants
Copyright © 2014, TCI Management Consultants. All rights reserved.